Getting the Deal Through - Life Science - Russia 2014 Chapter

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Information about Getting the Deal Through - Life Science - Russia 2014 Chapter
Business & Mgmt

Published on February 4, 2014

Author: azelenin



Detailed review of rules and regulations applicable to Pharmaceutical and Life Sciences Industries in Russia in an easy-to-comprehend Q&A form

® Life Sciences in 24 jurisdictions worldwide Contributing editor: Alexander Ehlers 2014 Published by Getting the Deal Through in association with: Adams & Adams Anderson Mori & Tomotsune ¯ Arzinger Bruun & Hjejle Dewallens & partners Drew & Napier LLC Ehlers, Ehlers & Partner Fasken Martineau LLP Fasken Martineau DuMoulin LLP Hoet Pelaez Castillo & Duque Intuity Lidings Mattos Muriel Kestener Advogados Mehmet Gün & Partners Moeller IP Advisors OlarteMoure Olivares PeliFilip SCA Porzio, Bromberg & Newman PC Preslmayr Rechtsanwälte OG Setterwalls Advokatbyrå AB SRS Advogados Szecskay Attorneys at Law Wenger & Vieli AG

contents Life Sciences 2014 Introduction Alexander Ehlers Ehlers, Ehlers & Partner 3 Contributing editor Alexander Ehlers Ehlers, Ehlers & Partner Argentina Andrea Robles Moeller IP Advisors 4 Publisher Gideon Roberton Business development managers Alan Lee, George Ingledew, Dan White, Robyn Horsefield, Adam Sargent Account managers Megan Friedman, Joseph Rush, Dominique Destrée, Emma Chowdhury, Lawrence Lazar, Andrew Talbot, Hannah Mason, Jac Williamson, Ellis Goodson Media coordinator Parween Bains Austria Rainer Herzig Preslmayr Rechtsanwälte OG 10 Belgium An Vijverman Dewallens & partners 16 Brazil Beatriz M A Camargo Kestener, Marco Aurélio A Torronteguy and Rubens Granja Mattos Muriel Kestener Advogados 23 Canada Timothy Squire and Mathieu Gagné Fasken Martineau DuMoulin LLP 30 Colombia Carlos R Olarte, Andres Rincon and Liliana Galindo OlarteMoure 37 Denmark Poul Heidmann and Nicolaj Kleist Bruun & Hjejle 42 France Christophe Henin and Anne Servoir Intuity 47 Germany Alexander Ehlers Ehlers, Ehlers & Partner 52 Administrative coordinator Sophie Hickey Hungary Sándor Németh and Rita Plajos Szecskay Attorneys at Law 60 Research coordinator Robin Synnot Japan Junichi Kondo, Yoshikazu Iwase, Kenshi Ando, Saori Ikeda and Yuu Ishikawa Anderson Mori & Tomotsune 66 ¯ Marketing manager (subscriptions) Rachel Nurse Mexico Alejandro Luna F and Juan Luis Serrano Leets Olivares 73 Head of editorial production Adam Myers Production coordinator Lydia Gerges Portugal César Sá Esteves and Ana Menéres SRS Advogados 78 Romania Carmen Peli and Mihaela Ciolan PeliFilip SCA 85 Russia Andrey Zelenin and Sergey Patrakeev Lidings 93 Singapore Benjamin Gaw and Tony Yeo Drew & Napier LLC 99 Production Editor Claire Ancell Director Callum Campbell Managing director Richard Davey Life Sciences 2014 Published by Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 © Law Business Research Ltd 2013 No photocopying: copyright licences do not apply. First published 2010 5th edition ISSN 2042-4329 The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer–client relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of December 2013, be advised that this is a developing area. Printed and distributed by Encompass Print Solutions Tel: 0844 2480 112 Law Business Research South Africa Dario Tanziani, Alexis Apostolidis and Pieter Visagie Adams & Adams 109 Sweden Odd Swarting and Camilla Appelgren Setterwalls Advokatbyrå AB 116 Switzerland Frank Scherrer Wenger & Vieli AG 123 Turkey Özge Atılgan Karakulak, Dicle Dogan and Tugçe Avcısert Geçgil ˘ ˘ Mehmet Gün & Partners 129 Ukraine Timur Bondaryev, Lana Sinichkina and Svitlana Malynovska Arzinger 136 United Kingdom Barney Sich and Antonina Nijran Fasken Martineau LLP 143 United States John Patrick Oroho and Brian P Sharkey Porzio, Bromberg & Newman PC 151 Venezuela Luis E López-Durán and Rosa Virginia Superlano Hoet Pelaez Castillo & Duque 164

Lidings Russia Russia Andrey Zelenin and Sergey Patrakeev Lidings Organisation and financing of health care 1 How is health care in your jurisdiction organised? Health care in Russia is allocated by the Constitution within the joint competence of the federal government and regional authorities (article 72, Constitution). The federal government is in charge of securing a uniform policy in the health-care sector (article 114, Constitution). The regulatory framework for health-care matters in Russia is represented by two fundamental statutes: • Federal Law No. 323-FZ on the Foundations of Healthcare for Russian Citizens, dated 21 November 2011; and • Federal Law No. 61-FZ on the Circulation of Drugs, dated 12 April 2010. Certain aspects are regulated in other statutes, for example Federal Law No. 326 on Mandatory Insurance in the Russian Federation, dated 29 November 2010; and Federal Law No. 44-FZ on the Public Procurements Contracting System, dated 5 April 2013 (in force from 1 January 2014). Medical and pharmaceutical activities in Russia may be carried out on the basis of a respective licence only. Such licences must be obtained by a medical or pharmaceutical company or by an individual entrepreneur (doctor or pharmacist) who is carrying out medical or pharmaceutical activities in their own name on an individual basis. 2 How is the health-care system financed in the outpatient and in-patient sectors? Russian health care (both outpatient and in-patient sectors) is financed through subventions from the federal budget; funds from municipal budgets; payments from the mandatory medical insurance fund that consists of contributions from employers and budgetary allocations for the unemployed; and income from medical institutions authorised under relevant laws and regulations. The law permits other miscellaneous funding sources such as charitable donations. Russian health care, in effect, provides universal coverage and guarantees provision of certain services complying with minimum standards free of charge. In recent years, the voluntary medical insurance system has become an increasing source of health-care system financing. At the same time, it should be noted that the reimbursement system is still at a rudimentary phase, leaving room for future developments. • Federal Law No. 38-FZ on Advertising, dated 13 March 2006 (the Law on Advertising); • Federal Law No. 323-FZ on the Foundations of Healthcare for Russian Citizens, dated 21 November 2011; • Federal Law No. 61-FZ on the Circulation of Drugs, dated 12 April 2010; and • Federal Law No. 135-FZ on the Protection of Competition, dated 26 July 2006 (the Law on Competition). The Law on Advertising contains special requirements and restrictions relating to the advertisement of pharmaceutical products, medical equipment and medical services, including methods of treatment and parapharmaceutical products (eg nutrition supplements, which are often confused with medicine by the Russian public). 4 What are the main rules and principles applying to advertising aimed at health-care professionals? Advertising of prescription medicines is allowed by the Russian legislation only if aimed at health-care professionals. Thus, it is not allowed to place prescription medicines advertising in media accessible to the general public. In cases where advertising is aimed at health-care professionals, certain conventional statutory restrictions may be inapplicable. The following advertising to health-care professionals is allowed, assuming the advertising is carried out exclusively at venues for medical or pharmaceutical exhibitions, fairs, seminars, conferences and other such events, or appears in specialised publications for medical and pharmaceutical professionals: • advertising of medicines in dosages prescribed by doctors, treatment methods, medical purpose items and medical equipment that require special training for their use; • advertising of medicines that contain restricted narcotic or psychotropic substances that can be used for medical purposes; and • advertising that would otherwise be prohibited because it may: • contain references to specific examples of health improve ments linked to use of the advertised product; • show individuals expressing gratitude for the advertised product; or • special warning formula concerning possible side effects associated with the use of the advertised product may be omitted in the advertising aimed at health-care professionals. It is also prohibited to combine advertising materials with administrations and prescriptions which health-care professionals issue to their patients. Compliance – pharmaceutical manufacturers 3 Which legislation governs advertising of medicinal products to the general public and health-care professionals? Advertisement of medicinal products in Russia is governed by the following laws: 5 What are the main rules and principles applying to advertising aimed at the general public? Advertising aimed at the general public is eligible only in application to over-the-counter medicines and para-pharmaceutical products. 93 © Law Business Research Ltd 2013

Russia Lidings Such advertisements must be accompanied by adequate warning language regarding side effects and the need to read the instructions or consult a specialist doctor (alternatively, in application to para-pharmaceutical products, the warning language must emphasise that such product is not a medicine). The relevant warnings or recommendations must amount to not less than three seconds for radio advertisements, not less than five seconds and 7 per cent of the screen space for television, cinema and video commercials, and not less than 5 per cent of the area of any hard-copy advertisement distributed in any other form. Advertising of an over-the-counter medicine should not contain information deviating from the text of the relevant medicine’s instruction (part of registration dossier). An advertisement of a pharmaceutical product (drug) aimed at the general public must not: • be addressed to minors (ie, persons under 18 years); • refer to specific cases of curing the disease or improving health conditions due to the use of the advertised product; • include individuals expressing gratitude for the effect of the advertised product; • create a positive impression about the benefits of the advertised product by referring to the results of the clinical and other trials performed as requirement for the registration of such product; • assert or assume that the target audience of the advertisement may suffer from certain diseases or health disorders; • create an impression that a healthy person should use the advertised product; • imply that it is not necessary to consult a doctor in order to use the advertised product; • guarantee positive effects of the advertised product, its safety, efficiency and absence of side effects; • present the advertised pharmaceutical product as a biologically active supplement or food supplement, or any other nonpharmaceutical product; or • contain assertions that the natural origin of the advertised product guarantees its safety or effectiveness. Advertising promotions involving giveaways of pharmaceutical products containing narcotic and psychotropic substances are prohibited. a background mention of certain drugs. According to state regulators, this practice is often used to circumvent restrictions that apply to drugs advertising. One other common infringement relates to para-pharmaceutical products which are advertised in bad faith, with the result that the public perceives the advertised product as a medicine. Advertising of para-pharmaceutical products (dietary supplements and nutritional supplements, infant foods) must not: • create the impression that they are drugs or have medicinal properties; • contain references to specific instances of healing people or improving their condition as a result of these additives; • contain an expression of gratitude to individuals in connection with the use of such additives; • encourage the abandonment of a healthy diet; • create an impression about the benefits of such supplements by referring to research (which is mandatory for state registration of such additives), and use the results of other studies in the form of direct advice regarding the use of such additives; and • advertising of baby foods should not represent them as full substitutes for breast milk and should not contain a statement about the benefits of artificial feeding of children. Advertising of products intended for use as substitutes for human milk, and the products included in the diet of the child during its first year of life, should contain information about the age restrictions of such products and avoid the need for expert advice. 8 Which legislation governs the collaboration of the pharmaceutical industry with health-care professionals? Do different rules apply regarding physicians in the in-patient and outpatient sector? 6 What are the most common infringements committed by manufacturers with regard to the advertising rules? One of the most common infringements concerns failure to provide warnings about possible side effects, or about the need to read instructions or consult a physician. At times, advertisers produce ‘combined’ commercials that focus on food supplements but contain 7 Under what circumstances is the provision of information regarding off-label use to health-care professionals allowed? Russian law does not regulate the procedures for providing information on off-label use to health-care professionals. Therefore, such information may be conveyed to them by any lawful means, including in scientific monographs, professional research articles, professional guidebooks, conferences or roundtable reports, as well as through meetings with health-care professionals. However, it should be noted that all information about properties and characteristics of drugs and medical equipment must correspond to the information contained in the product’s pre-approved instructions (leaflet) for use and application. This means that all advertising and marketing materials for a pharmaceutical product must reflect the information contained in the product’s instructions. Any deviation in the information circulated about the product and the instructions for its use shall be considered as contradiction, and the competent authorities may demand that it is brought into full compliance with the pre-approved instructions for use and application. According to the relevant procedures for prescribing the drugs approved by the Russian Ministry of Healthcare and Social Development (MOH): • off-label use of any drug for an outpatient is directly prohibited, and the doctor is personally liable for the breach of this prohibition (such liability may include compensation of damages as well as professional debarment for a specified period of time); and • off-label use of any drug for an in-patient must be preapproved by a special commission to be created for this purpose within the respective health institution. Relations and interaction between health-care professionals and the pharmaceutical industry are now covered under articles 74 and 75 of Federal Law No. 323-FZ on the Foundations of Healthcare for Russian Citizens (the Law on Foundations of Healthcare). These provisions came into force on 1 January 2012. Article 74 of the Law on Foundations of Healthcare prohibits medical and pharmacy employees from: • accepting gifts, cash, paid entertainment, holiday or travel from companies manufacturing or distributing medicines or medical equipment; • entering into written or oral agreements with companies manufacturing or distributing drugs or medical equipment, concerning the prescription or recommendation of certain drugs or equipment to patients; • receiving medicine or medical equipment samples from those companies to give away to patients; • providing false or incomplete information on the number, type and name of alternative medicines or medical equipment that may be used in lieu of the prescribed medicine or piece of medical equipment; and • one-on-one visits of medical representatives of those companies to medical professionals or treating physicians. The exceptions to the above prohibitions include medical professionals’ involvement in educational or scientific activities, clinical 94 Getting the Deal Through – Life Sciences 2014 © Law Business Research Ltd 2013

Lidings Russia trials and participation in informational events sanctioned by the enterprise administration. Article 75 of the Law on Foundations of Healthcare includes a definition of ‘conflict of interest’. In the event of a conflict of interest, the affected medical professional must report the conflict to his or her superiors, who in turn should refer the details to a special federal agency responsible for resolving such situations. It should be noted that violation of the above restrictions results in liability of health-care professionals and not of the pharmaceutical industry. The bill introducing the ‘mirror’ liability for representatives of the pharmaceutical industry has recently been amended to exclude any specific penalties for them. 9 What are the main rules and principles applying to the collaboration of the pharmaceutical industry with health-care professionals? In addition to the rules and restrictions set out in articles 74 and 75 of the Law on Foundations of Healthcare, principles stipulated in the Doctors’ Code of Ethics of the Russian Federation adopted by the medical community in 1997 (the Code) should also be mentioned. The Code is non-mandatory and additional to the applicable laws and regulations. In particular, the Code states that: …a doctor shall not accept incentives from manufacturers or distributors of pharmaceutical products for the prescription of their products. A doctor shall prescribe medicines strictly on the basis of medical factors and solely in the interests of the patient. Regarding collaboration between the medical community and foreign pharmaceutical companies, the AIPM Marketing Code of Practice provides basic principles for such collaboration, providing in particular that such collaboration: • should be aimed at informing health-care professionals about pharmaceutical products, providing them with scientific and educational information and supporting scientific research in medicine and medical education; • should avoid causing conflicts of interest with regard to professional obligations on the one hand and economic interests on the other; • must not involve pharmaceutical companies offering, promising, providing or giving health-care professionals any kind of remuneration for prescribing or recommending certain pharmaceutical products to patients; • must support professional training (including sponsoring participation in conferences and other professional events, as well as issuing grants, stipends and subsidies); and • should not be made contingent on the amount of a pharmaceutical product prescribed or sold. It should also be noted that the MOH has recently enacted an instruction where all medicine prescriptions be issued without specifying trade names (ie, only mentioning the medicine’s INN). 10 What are the most common infringements committed by manufacturers with regard to collaboration with health-care professionals? As the provisions of the Law on Foundations of Healthcare have come into force only recently, no representative administrative practice is currently in place, and hence no statistics on infringements are available. 11 What are the main rules and principles applying to the collaboration of the pharmaceutical industry with patient organisations? Patient organisations are relatively new in Russia, and to date there is no legal or regulatory framework governing their relationship with the pharmaceutical industry. The rights of individual patients in relation to pharmaceutical companies are more developed. According to the Russian Declaration of Patients’ Rights, adopted in May 2010: …every person has the right to direct access to information on scientific research, the possibilities of pharmaceutical therapy, and technological innovation. This information may be provided by public or private sources, provided it meets criteria for accuracy, reliability, and transparency. Rules are also set out in the AIPM Marketing Code of Practice, which states that ‘when a patient asks a pharmaceutical company for information, such requests must be satisfied’. Again, the aforementioned rules are not mandatory and represent mere recommendations for the AIPM members. 12 Are manufacturers’ infringements of competition law pursued by national authorities? The Federal Antimonopoly Service (FAS) is in charge of enforcing Federal Law No. 135-FZ on the Protection of Competition, dated 26 July 2006, and has been active in prosecuting violations on the pharmaceutical and medical equipment markets. Most violations relate to selective distribution and alleged attempts to restrict access to product markets for new participants. A growing number of violations prosecuted by the FAS relate to public procurements. Apart from violations connected with reasonability of certain particular bid requirements, special attention is paid to distributor cartels designed to drive prices either down or up if product sales occur via state procurement procedures as envisaged in the currently effective Federal Law No. 94-FZ on Placement of Orders for the Supply of Goods, Performance of Works or Rendering Services for State and Municipal Needs, as amended (the Law on State Orders, which terminates on 31 December 2013 and is then replaced by the Federal Law No. 44-FZ on the Public Procurements Contracting System, dated 5 April 2013). 13 Is follow-on private antitrust litigation against manufacturers possible? Follow-on private antitrust litigation against manufacturers is not possible in Russia. The FAS is in charge of enforcement of antitrust law provisions. Accordingly, a private person (individual or a company) may only file a complaint with the FAS against a manufacturer allegedly breaching antitrust law requirements. The FAS may, upon consideration of the complaint, initiate the administrative prosecution. However, the applicant will be not a party (or a beneficiary) to the relevant administrative proceedings. Compliance – medical device manufacturers 14 Is the advertising of medical devices and the collaboration of manufacturers of medical devices with health-care professionals and patient organisations regulated as rigorously as advertising and collaboration in the pharmaceuticals sector? Applicable laws do not make any distinction between manufacturers of medical devices and manufacturers of pharmaceuticals in terms of collaboration with health-care professionals. Both are regulated to an equal degree by articles 74 and 75 of the Law on Foundations of Healthcare, as described in question 8. Also, from the standpoint of advertising restrictions, the same requirements generally apply both to medicines and to medical devices (with some minor exceptions which are reasoned by common sense rather than by any particular requirements to medical devices as opposed to the medicines). 95 © Law Business Research Ltd 2013

Russia Lidings Pharmaceuticals regulation 19 Which medicines may be marketed without authorisation? 15 Which legislation sets out the regulatory framework for granting marketing authorisations and placing medicines on the market? The Law on Circulation of Drugs sets out the procedure for obtaining marketing authorisation for medicines in Russia. Such marketing authorisation is issued by the MOH, and represents an essential prerequisite for lawful circulation of the relevant medicine in Russia. The Law also provides a procedure for registering and issuing registration certificates for active pharmaceutical ingredients. Besides this, special requirements apply to the maximum manufacturer’s price for medicines put on a special list (vital and essential drugs), which are subject to registration with MOH before placing on the market. 16 Which authorities may grant marketing authorisation in your jurisdiction? As of 1 September 2010, pharmaceutical products are registered in Russia by the Department for Regulation of Medicinal Products of the MOH. 17 What are the relevant procedures? In accordance with the Law on Circulation of Drugs, the procedure for the registration of a new drug consists of the following stages: • pre-clinical trial of a drug; • filing an application for state registration of the pharmaceutical product along with the dossier documents; • obtaining expert opinions prior to clinical trials (toxicology, ethics, quality assessment, etc); • clinical trials of the product carried out by one of the health-care institutions specifically accredited by the MOH for this purpose; and • final assessment of the registration dossier and registration of the medicine. A decision on the pharmaceutical product’s state registration is made on the basis of the results of the above assessments and trials. The Law on Circulation of Drugs requires that the process of state registration of a pharmaceutical product is completed within 210 days, excluding the time required for carrying out clinical trials and the time necessary to produce the relevant documentation. The registration certificate for a medicine must describe the medicine form and dosage. A medicine registered in Russia for the first time is issued with a registration certificate for five years. Following the expiry of the initial five-year term, the registration of the medicine must be confirmed under a separate expedited procedure, described in detail in article 29 of the Law on Circulation of Drugs, which involves, among others, proving the quality of the medicine. If proved positive, the registration for such medicine is granted and the registration certificate is issued for an indefinite period of time. Following state registration, registered medicines are listed in a special state register of medical products, in accordance with article 33 of the Federal Law on Circulation of Drugs. 18 Will licences become invalid if medicinal products are not marketed within a certain time? Are there any exceptions? The Law on Circulation of Drugs does not condition the validity of the state registration of a pharmaceutical product by the marketing or sale of a product within a certain time frame. However, the ‘sunset clause’ is currently being discussed with regard to massive amendments to the Law on Circulation of Drugs. Pursuant to this ‘sunset clause’, marketing authorisation may be revoked when a registered drug is not marketed within two years of its initial registration. Pursuant to article 13 of the Law on Circulation of Drugs, state registration is not required for: • pharmaceutical products manufactured on-site by pharmacies, veterinary pharmacies or by individual entrepreneurs licensed as pharmacists, according to prescriptions and requirements of medical or veterinary organisations; • natural plants as medicinal substances; • drugs acquired by individuals outside Russia and intended for personal use; • medicines intended for export; or • radiological drugs manufactured by medical organisations in accordance with applicable laws and regulations. 20 Are any kinds of named patient programmes in place? If so, what are the requirements for pre-launch access? The Federal Law on the Circulation of Medicines allows for socalled ‘named patient supply’ programmes. In particular, a stateowned federal hospital may decide to administer a medicine that has not been registered in Russia. Such medicine must be intended for a specific patient. Recent administrative practice demonstrates that in similar cases the administration and purchase of the medicine not registered in Russia may become an obligation of the public hospital. The new Law on Public Procurements Contracting System also provides for a simplified procurement procedure in cases of ‘named patient supply’. Pricing and reimbursement of medicinal products 21 To what extent is the market price of a medicinal product governed by law or regulation? Pursuant to article 61 of the Law on Circulation of Drugs, the maximum sale price for any vital or essential drug must be registered with the MOH. Each year, the Russian government approves the list of vital and essential drugs (the EDL) for the upcoming calendar year, based on their international non-patented name (INN). If a medicine is included in the EDL, its maximum sale price that the foreign supplier (for imported drugs) or domestic manufacturer (for locally produced drugs) may charge to the first distributor is subject to mandatory registration with the MOH, based on the economic case presented by the supplier. If the drug is not on the EDL, the supplier may establish the sale price at its sole discretion. The wholesale and retail margins for drugs included on the EDL are also regulated in that the maximum wholesale and retail margins for such drugs are established by regional authorities for their respective region. The typical maximum wholesale margin is 15 per cent and the typical retail margin is 25 per cent, although higher thresholds may apply in regions requiring additional market stimulus (eg, far north regions). If the drug INN is not included on the EDL, none of the above pricing restrictions will apply. 22 Must pharmaceutical manufacturers negotiate the prices of their products with the public health-care providers? No. A manufacturer is not required to negotiate the maximum sale price for an EDL drug with public health-care providers in order to register such price with the MOH. Registration is made on the basis of the economic case showing, in particular, the sale price charged by the manufacturer in other countries for the same product. Regarding the actual price the manufacturer or foreign supplier charges the distributor, public health-care providers do not usually interact directly with manufacturers and foreign suppliers of 96 Getting the Deal Through – Life Sciences 2014 © Law Business Research Ltd 2013

Lidings Russia pharmaceutical products. The public health-care providers submit a request for relevant drugs to the respective health-care authority (regional or federal), which then organises the tender for the supply of the relevant drugs and subsequently purchases directly the drugs from the supplier (normally, the Russian distributor). Thus, the prices of pharmaceutical products supplied by private companies to public health-care providers are determined in the course of state procurement procedures carried out by the respective authorities. These procedures must comply with the Law on State Orders and respective regulations. In particular, a reverse tender or auction mechanism is normally used for determining the ultimate purchase price where the registered maximum price for an EDL drug is the starting point, and the bidder who offers the lowest price wins the auction. As the EDL is rather broad, virtually all auctions organised by the competent authorities cover EDL drugs only and thus the registered price for the respective EDL drug is the starting point in such tenders. A non-EDL drug can only be supplied to a public health-care provider through auction or tender (this is a mandatory requirement of the Law on State Orders). The bidder offering the lowest price should win the tender or auction. The FAS is clamping down on regional authorities to eliminate the practice of rigging state tenders and auctions, with the result that only one bidder can qualify. Similarly, the FAS has initiated a few antitrust proceedings against certain Russian distributors, accusing them of concerted actions in the context of state tenders, with the result that only one distributor participated in the auction with the highest price and therefore won it, to the detriment of the public interest. These cases of concerted actions, in turn, resulted in the opening of criminal proceedings against the top managers of some of those distribution companies. medicines included in EDL are subject to the pricing restrictions and reimbursement principles described above. The MOH approves the methodology for pharmaceutical producers to set maximum manufacturers’ prices for medicinal preparations on the EDL. The Federal Tariff Service approves the methodology for regional executive authorities to set the maximum wholesale and resale markups on actual sale prices set by manufacturers of EDL drugs. 23 In which circumstances will the national health insurance system reimburse the cost of medicines? The production, import and sale or distribution of counterfeit pharmaceutical products and low-quality medicinal substances is prohibited in Russia. To ensure medicines imported and sold in the country are of high quality, Russian laws and regulations set out stringent licensing requirements that manufacturers, importers and retailers must follow, such as: • for manufacturers – the licensee’s compliance with rules on the production of medicinal products; and • for wholesalers and pharmacies – the licensee’s compliance with requirements that prohibit the sale of medicines that have lost effectiveness, medicines with expired shelf-life dates, etc. The Russian mandatory medical insurance system provides for a limited reimbursement of the cost of medicines, as described below. In-patient care EDL medicines (see question 21) are provided free of charge regardless of the duration of treatment. If a patient is prescribed non-EDL drugs, they must either purchase such medicine or – if the medicine is not yet registered in Russia – in theory, have it purchased by the hospital in the manner described in question 20 above. Outpatient care The reimbursement of EDL medicines depends on the patient’s category and nature of illness. Specifically, some classes of patients (for example, World War II veterans, Heroes of the Russian Federation and children up to three years of age) are entitled to obtain prescription drugs at no charge. Other categories (for example, nonworking class II disabled, and pensioners receiving a minimum pension) have to pay 50 per cent of the retail price of the prescription drugs. The list of persons qualifying for such benefits is established by Federal Law No. 178-FZ, dated 17 July 1999, on State Social Care and Government Resolution No. 890, dated 30 July 1994, on State Support for the Development of the Medical Industry and Improvement in the Supply of Medicinal Products and Medical Devices to the Public and Health-care Institutions. In addition, a person is entitled to free EDL drugs if such person suffers from certain specific diseases (established by law) such as HIV, cerebral palsy, cancer and tuberculosis. 24 If applicable, what is the competent body for decisions regarding the pricing and reimbursability of medicinal products? 25 Are manufacturers or distributors of medicinal products statutorily obliged to give a discount? Neither manufacturers nor distributors are obligated to provide any special discount on medicinal products. However, discounts or bonuses may be freely negotiated in the context of a specific contract – such discount policies are widely used as a form of sales stimulation, subject to restrictions under Russian competition law that apply to pharma companies with dominant positions in respective product markets. Recent administrative practice demonstrates that pricing issue (combined with the discount policy) may be regarded under circumstances as an instrument restricting competition. Accordingly, the FAS may issue a warning with the requirement to review the relevant contractual provisions. In the first line, this may be applicable to contracts between the international manufacturers and Russian distributors participating in public procurements. Medicine quality and access to information 26 What rules are in place to counter the counterfeiting and illegal distribution of medicines? Violation of the aforementioned obligations may lead to the suspension or cancellation of a pharmaceutical licence (be it for manufacturing, or wholesale or retail sale). Importing and distributing fake and counterfeit medicinal products may also qualify as infringement of IP right with possible criminal sanctions, in addition to damages which may be awarded to an aggrieved party through a court action, as well as administrative penalties (usually, in the form of fines). 27 What recent measures have been taken to facilitate the general public’s access to information about prescription-only medicines? Unlike in EU countries, there has not been any tangible effort aimed at facilitating the general public’s access to information about prescription medicines. In accordance with article 67 of the Federal Law on the Circulation of Medicines, information on prescription medicines should appear only in specialised publications intended for medical, pharmaceutical and veterinary professionals. As mentioned previously, public advertising of such medicines is prohibited. The Russian government approves the EDL on an annual basis. A draft of the EDL is prepared by the MOH. Accordingly, the 97 © Law Business Research Ltd 2013

Russia Lidings Update and trends Recent updates and trends include: • the introduction of GMP standards on a mandatory basis, starting from 1 January 2014; • the introduction of a new public procurement system, starting from 1 January 2014; • amendments to the Law on Circulation of Drugs (No. 61-FZ), which introduce normative definitions for biological drugs and biosimilars, create specific requirements for the orphan medicines, differentiate between ‘generics’ and ‘interchangeable medicines’, introduce more complicated registration procedure for generics, decrease the statutory time frames for the 28 Outline major developments to the regime relating to safety monitoring of medicines. Pursuant to article 64 of the Law on Circulation of Drugs, all market participants involved in the sale and distribution of drugs must disclose and report to the MOH any and all information about possible adverse effect of the drugs sold or distributed by them if and when such information becomes known to them. Failure to disclose the information about adverse health effects may lead to administrative or criminal liability. However, there is still no uniform pharmacovigilance policy in place. Creation of a uniform reporting and evaluation mechanism is currently on the agenda for further regulatory developments. • • • • registration proceedings in the frame of application for marketing authorisation, etc; the abstraction from use of medicine’s trade name in physician’s administration and public procurements; the adoption of medical aid standards for the treatment of most common diseases (approximately 1,000 standards within 2013); the introduction of new limitations for advertising of para pharmaceutical products (nutrition supplements); and discussions on the uniform regulation of medicines circulation at the level of the Customs Union. Vaccination 29 Outline your jurisdiction’s vaccination regime for humans. Regulations for the vaccination regime for humans are contained in the Federal Law No. 157-FZ on Immunological Prophylaxis of Infectious Diseases, dated 17 September 1998. Pursuant to this statutory act, the MOH annually approves the National Vaccination Calendar, namely the schedule for vaccinations within the upcoming year. Public health-care establishments are obliged to provide their patients with vaccines pursuant to this Vaccination Calendar. Andrey Zelenin Sergey Patrakeev Naberezhnaya Tower Block C Presnenskaya nab 10 Moscow 123317 Russia Tel: +7 495 989 4410 Fax: +7 495 989 4420 98 Getting the Deal Through – Life Sciences 2014 © Law Business Research Ltd 2013

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